Statistics Point To A Continued Seller’s Market
Readers of my monthly Market Watch and Homes Sold information pieces have hopefully noticed a consistent message: that Bridgewater is in a seller’s market. And I have offered statistics to support my pontifications; normally the month’s supply of available homes, or better known as housing inventory. I have also used this statistic, and others, to support the idea that a seller’s market will carry on and that home prices will continue to increase even with the cloud of rising mortgage rates hovering above.
The question to be asked is why?
The market and its characteristics are defined by the principle of supply and demand. When demand is greater than supply, a seller’s market, buyers tend to drive prices up on the limited amount of available homes. In times when the opposite is occurring, when supply is greater than demand, appreciation on available homes is limited since buyers now have a greater choice of properties and are not pushed to make quick decisions in light of less competition for each home. Thus a buyer’s market.
There are statistics that measure supply versus demand and define the current market. One key numeric is the month’s supply of available homes. When there is less than a 6-month supply of available inventory the market is considered favoring the seller and appreciation is expected. Between 6 and 7 months is neutral, where prices may match the rate of inflation. And lastly, if there is more than a 7-month supply, it is considered a buyer’s market and a depreciation of home values should be expected.
So, where is Bridgewater’s market. As of the beginning of September, Bridgewater had a 2.43 month supply of homes, down from 2.98 the year prior. There were 709 active listings during 2018, down 2.5% from last year and 6.5% from 2016. Sold listings were down 5.4% and 8.2% respectively, while listings under contract were down 1.8% and 6.7%. What these measurements are suggesting is that the seller’s market in Bridgewater is actually deepening, with little expectation of altering course.
An influx of new listings for sale could unravel this scenario. But with Bridgewater mostly built out, new construction will not be the catalyst. Homeowners moving to other areas/states, upsizing or downsizing will provide some new activity, but will it be enough to increase overall supply from current levels? Will have to see. But if I was a betting man, I would let it ride on Bridgewater staying in a seller’s market for the foreseeable future.
If you have questions regarding local market conditions, market values or what it takes to market your home, contact me. I would welcome the opportunity to meet with you and discuss your concerns and plans.
Al Fross is a Coldwell Banker Residential Brokerage Sales Associate based in the Bedminster/Bridgewater office. Al has lived in the Bradley Gardens section of Bridgewater since 1993 and has been an active volunteer in many recreational and community organizations including serving as a current member of Bridgewater’s Board of Adjustment and as past Chairman of the Township’s Planning Board. His knowledge of the Bridgewater and surrounding areas makes him the perfect “partner” when selling your existing property or buying your new home.